The Current Bull And Bear Case For Nvidia (NASDAQ: NVDA)

NVIDIA Corporation (NASDAQ: NVDA), one of the hottest stocks of 2016 is making a case to retain the title for 2017. But with lots of time remaining in the calendar year and a much richer valuation, the bull versus bear debate will continue to be heavily contested.

Part of Nvidia’s bull run has been its ability to offer investors a 35 percent growth rate, Erin Gibbs, portfolio manager at S&P Global said during a recent CNBC “Trading Nation” segment. But now the company’s growth rate will cool down to around 7 percent next year so there may be a disconnect between the stock and expectations. In fact, Nvidia’s stock is trading above Wall Street’s target which implies the Street is actually modeling the stock to come lower towards its target.

“This is definitely a pop,” she explained. “And we’ve seen just a huge increase in Nvidia’s valuations compared to the semi industry.”

On the other hand, the case for buying or holding on to Nvidia’s stock could be made through the charts, Rich Ross, head of technical analysis at Evercore ISI explained. A stock that has gained more than 180 percent over the past year alone doesn’t need a “trend-following technician to tell you to buy Nvidia.”

“If you look back to November of last year, that third-quarter earnings release, it set the stage for a one-month surge, from that release in November to that peak in December, of 64 percent,” he explained. “I’m not telling you we’re going up 64 percent before year-end, but I’m not not telling you that can happen.”